Oil-Dri Corp. of America (NYSE:ODC) Q2 2019 Earnings Conference Call - Final Transcript

Mar 10, 2019 • 08:00 pm ET

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Oil-Dri Corp. of America (NYSE:ODC) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Q2 2019 Oil-Dri Corporation of America Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions)

I would now like to turn the call over to Dan Jaffee, President and CEO. Sir, please begin.

Executive
Daniel S. Jaffee

All right, Mark. Thank you, and welcome everyone to the second quarter and six month fiscal 2019 industrial teleconference. With me in the conference room here in Chicago is Mike McPherson, our Chief Development Officer; Susan Kreh, our Chief Financial Officer; Laura Scheland, our General Counsel; Leslie Garber who will be taking over the reins to be our Director of Investor Relations and last, but not least, and a big round of applause, this is Reagan's last meeting as our Director of Investor Relations. She got promoted for good behavior. She's been promoted to focus exclusively on marketing.

So Reagan, thank you for everything and please take us through the safe harbor.

Executive
Reagan B. Culbertson

Thanks, Dan. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results on those periods may materially differ. In our press release and our SEC filings, we highlight a number of important risk factors, trends and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in Oil-Dri stock.

Executive
Daniel S. Jaffee

Thank you. And at this time, I'd like to call in Susan to walk us through the quarter and the six months.

Executive
Susan M. Kreh

Sure, love to. Today, Oil-Dri reported sales of $69.9 million from second quarter of fiscal '19, which was a 1% increase over the second quarter of fiscal '18. Sales in our retail and wholesale products group were up 5% in quarter, driven by growth in cat litter, where we are experiencing strong demand in our lightweight private label products. Our Business-to-Business Product Group continued to see weakness in the quarter with sales down 3% compared to the second quarter of fiscal '18, as performance of our Fluids Purification products were down internationally due to price competition by local suppliers.

We also experienced a continuation of the first quarter reductions in our Amlan business in Asia driven by the widespread impact of the African Swine Flu. While we do not expect an immediate turnaround in the swine industry in Asia, we do expect to see some recovery in the back half of the year as we continue to work with our customers on the trials and adoption of products such as Varium for poultries and NeoPrime for piglets to improve feed efficiency around the world.

We also reported sales of $136 million for the first six months of the fiscal year, which was flat to the same period last year. Our Retail and Wholesale Product Group reported sales that were up 4% over the prior year and, again, driven by the strong performance